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Can a class action lawsuit be filed against an employer for enforcing a non-compete agreement upon their former employees in CA?
Dublin, CA
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Posted 18 days ago in Contracts / Agreements
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This employer forces California based employees to sign a non-compete agreement as a condition of employment, plus, they have a contract with a specific competitor saying that all former employees of their company and all former employees of the specific competitor cannot be hired by either company for a period of 12 months from the end of employment. Both companies are based outside of California. One is based in Utah and the other is based in Georgia. First, California law states that non-compete agreements are void. Wouldn't the other contract be void as well, the one preventing former employees from working with the specifically named competitor? Is a class action possible for those with little to no money for up front fees? I can't afford to take on this action myself.
Additional information
I am a former employee of the company based in Utah. I know of many colleagues who are also formerly employed with the company based in Utah, as well as colleagues who are formerly employed with the company based in Georgia. None of us can qualify to be employed with the other company because of an arbitrary contract designed to prevent one company from recruiting employees from another. Unfortunately, this contract also applies to former employees of each company for 12 calendar months, regardless if the former employee was terminated, laid off, or resigned on their own accord. It goes without saying that preventing former employees the employment options that may be available with the competitor, in this economy, is completely irresponsible! But is it illegal, or at least, can either company be financially punished on behalf the aforementioned former employees of both companies? (Many of whom may still be unemployed because of these contracts). Answers (2)
Robert John Murillo
This attorney is licensed in Colorado and 1 other state.
Posted 18 days ago.
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This would not likely qualify as a class even assuming you could get a class action firm interested, which I doubt. A class action requires, among other requirements, that the class has sufficient number of plaintiffs. Normally that means plaintiffs in the hundreds at a minimum to usually thousands.
Moreover, a suit requires damages. This contract may be voidable and there can only be damages at the point that they try to enforce this contract. Just because someone signs a contract does not mean there have been damages necessary for a claim. In short, contact a local employment lawyer to review the contract. To save money contact other employees who have signed this contract and pool your money to pay for professional advice. The amount each will pay will then be minimal. DISCLAIMER—This answer is for informational purposes only and discusses general legal principles, trends, and considerations and is not intended as specific legal advice regarding your question. This answer does not establish an attorney client relationship. 
Pamela Koslyn
This attorney is licensed in California.
Posted 18 days ago.
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You're right, non-competes aren't enforceable in CA. What do these contracts say about what state's law governs their interpretation and enforcement? If they say CA, or if the language is "permissive," then it would be hard for the employer to enforce these clauses, and if there's an attorney's fee clause, any employee required to defend themselves would get their legal fees as well.
As my colleague noted, this isn't the kind of claim subject to class action status, and no one has any damages to sue for. Please see my Legal Guide linked below on venue and jurisdiction for more on which state's law governs a contract. You need to see a lawyer to know where you stand. Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship. |
